Who needs workers’ compensation insurance coverage?

Workers’ compensation insurance is a form of insurance that protects employees and employers against financial loss in case of an injury at a workplace. It is required that employers should carryworkers compensation insurance for all their employees. For employees’ compensation purposes, they can include borrowed staff, day laborers, leased staff, part-time employees, family members, volunteers and subcontractors. Basically, there are different groups of people that need workers’ compensation insurance. All workers working in for-profit businesses need workers’ compensation insurance. Live-in maids, companions, sitters and domestic workers must also have this insurance. It is worth noting that any worker employed more than 40 hours a week in any residence needs workers’ compensation insurance.   

Depending on the state, farm workers who are paid more than $1,200 for different farm jobs need worker’s compensation insurance. Workers who are compensated by non-profit organization are also in the category of workers who need this insurance.  Although all these set of workers need workers compensation insurance, there are also other sets of people who do not need this insurance. Sole proprietors, one-person corporations whereby individuals own all the stock and individuals in partnership businesses do not require workers’ compensation coverage if they have not employed workers at their place of business. Another point to note is that business owners can also include themselves in this policy because it protects them against financial loss. 

Independent contractors or workers who are under direct control of a contactor are considered employees of the independent contractor. For such workers, they need workers comp insurance regardless of their status as far as tax is concerned. The tax status of any worker does not determine whether the worker requires workers’ compensation insurance. As far as workers’ compensation is concerned, it is very important that employers should comply with the law. In certain states, an employer who does not comply with this requirement can face a penalty of over $2,000 for each 10 days the employees remain without workers’ compensation insurance. In addition, employers face penalties for any misrepresentation of payroll, record-keeping and number of employees.

If an employer does not carry workers’ compensation insurance for over five employees, this is considered a felony in most states. If this insurance is not carried for 5 employees or less, this is considered as a misdemeanor. Offenders in both cases will be pursued with either stop-work orders or any penalty as defined by the law. Penalized businesses and people will be debarred from getting public contracts and the duration will mostly depend on the state the business or person is located. If a business owner does not have this insurance coverage, the business owner will be required to personally pay for any medical care and lost wagers of all the uninsured workers.   

To get  more information click on this link workers compensation insurance.